WHAAAAT!? Believe it, it’s true. Overall, private company payrolls actually grew overall by 27,000 in May, according to data released today by ADP and Moody’s Analytics. The increase was far smaller than Wall Street had projected due to companies with 50 employees or less experiencing job losses last month.
What’s in the Numbers?
That’s right, private sector small business employment decreased by 52,000 jobs from April to May according to the May ADP Small Business Report. And if we take an even closer look, we find the decrease was heavily weighted (-50,.000) on the very small (1-19 employees) businesses vs. other small (20-49 employees) companies. Negative 50,000 fewer people employed by small, private companies from April to May in an economy with record unemployment. While the actual sources of jobs lost are concentrated in certain areas, for argument’s sake that’s 1000 fewer jobs filled in each of the U.S. states. (For those interested in going down another layer to sector & industry, there’s more detail in this infographic on the ADP website.)
Then we get to the real question – Where are these people going? Are they leaving the labor force entirely, leaving the country, going on sabbatical? Given the U.S. Bureau of Labor Statistics report that non-farm employment increased by 263,000 in April, I think we know. They took jobs with medium – large companies.
Why We Care
“Small businesses are creating new jobs at an all-time high, which has massive implications for the economy since two of every three new jobs is created by a small business,” said Juanita Duggan, President and CEO of the National Federation of Independent Businesses (NFIB). “Owners are doing everything they can to hold onto the employees they have, while trying to produce effectively without a full staff.”
The reality is that most Americans do NOT work for large corporations and large corporations do NOT drive job growth. This makes the numbers very relevant for most of us because of if you’re not the owner or employee of a small business, someone near and dear to you very likely is. That means we all have a stake in the sustainability and growth of small businesses around us and across the country.
Doing More with Less
Generally, doing more with less isn’t a fun, well-received concept but we’re in a time when simplifying, operating lean, and continuous improvement are major themes. So, if we look at it from both an efficiency and a priority standpoint, only a few or so hires are mission critical and any gaps filled with overtime, cross-training and other short-term talent strategies.
There’s that word: strategy. That’s right, in the face of a nationwide economic challenge like the talent shortage a casual, ‘deal with it as it comes up approach’ is a business owner’s ticket to severe operating and human resources issues. At a time when the economy is booming and other businesses are growing, you want a piece of that too but not only are you unable to find people to fill new jobs you want to create you have existing employees leaving to go to larger firms. Being short-handed affects everyone in the organization in a negative way and as stress increases due to an over-worked staff and a stressed-out boss, people “voting with their feet” exacerbates this problem.
Unfortunately, there’s no quick fix to a labor shortage situation. In fact, you’ll probably find it counter intuitive to take a step back to really evaluate the situation. You’re far too busy, right?
Wrong. In this situation it’s critical time to re-think your current goals and strategy to first, make adjustments to stabilize the situation, and then evaluate your options to make critical decisions about the best way to move forward successfully.
The good news is there’s help out there. Connecting with a strategy consultant, someone who understands business processes and wants to help improve yours will lead to sustainable results for the long term, which increases value for your company.
For more information about strategy consulting or to discuss the current challenges facing you in your business click on the link below to connect with us.